| Summary of Significant Accounting Policies | Note
2 - Summary of Significant Accounting Policies Principles
of Consolidation and Non-Controlling Interest These
consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its wholly
owned subsidiaries. All intercompany transactions and balances have been eliminated. For
entities that are consolidated, but not 100% owned, a portion of the income or loss and corresponding equity is allocated to owners other
than the Company. The aggregate of the income or loss and corresponding equity that is not owned by us is included in Non-controlling
Interests in the consolidated financial statements. SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) Business
Combinations The
Company accounts for business acquisitions using the acquisition method of accounting, in accordance with which assets acquired and liabilities
assumed are recorded at their respective fair values at the acquisition date. The
fair value of the consideration paid, including contingent consideration, is assigned to the assets acquired and liabilities assumed
based on their respective fair values. Goodwill represents the excess of the purchase price over the estimated fair values of the assets
acquired and liabilities assumed. Significant
judgments are used in determining fair values of assets acquired and liabilities assumed, as well as intangibles. Fair value and useful
life determinations are based on, among other factors, estimates of future expected cash flows, and appropriate discount rates used in
computing present values. These judgments may materially impact the estimates used in allocating acquisition date fair values to assets
acquired and liabilities assumed, as well as the Company’s current and future operating results. Actual results may vary from these
estimates which may result in adjustments to goodwill and acquisition date fair values of assets and liabilities during a measurement
period or upon a final determination of asset and liability fair values, whichever occurs first. Adjustments to fair values of assets
and liabilities made after the end of the measurement period are recorded within the Company’s operating results. Effective
January 1, 2022, the Company executed a management agreement with Torch Wireless (“Torch”). Generally, the Company was engaged
to handle the following services:
● Oversee
management of the business being conducted by Torch,
● Involved
in the performance of Torch’s obligations under contracts regarding its business operations and maintenance of Torch’s
customer relationships,
● Assist
Torch with regulatory compliance,
● Manage
all billing and collection functions, including the right to collect revenues related to Torch’s business operations, as part
of the agreement, Torch may not participate in this function; and
● Manage
all payment functions related to the business, including the right to disburse funds, as part of the agreement, Torch may not participate
in this function Torch
is a provider of subsidized mobile broadband services to consumers qualifying under the federal guidelines of the U.S. Federal Communication
Commission’s Affordable Connectivity Program (“ACP”). The ACP provides the Company with up to a $ 100 30 SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) With
the purchase of Torch, the Company offers subsidized mobile broadband in all fifty (50) states. It
was determined that the Company had acquired 100 At
the time of acquisition, Torch had no significant assets or liabilities. The Company paid $ 800,000 800,000 At
the time of acquisition, Torch had nominal revenues and losses. As a result, and given the immaterial nature of this acquisition, the
Company elected not to present any pro-forma financial information during the year ended December 31, 2022. In
addition, the Company was required to pay the Sellers monthly residual payments for customers enrolled by the Company through December
31, 2022 of either $ 2 3 For
the nine months ended September 30, 2023 and 2022, the Company incurred expenses of $ 0 584,038 This
transaction did not involve the purchase of a “significant amount of assets” as defined in the Instructions to Item 2.01
of Form 8-K. Additionally, the acquisition of Torch was not deemed to be significant at any level under SEC Regulation S-X 3.05 and did
not require the presentation of any additional historical audited financial statements. For
financial reporting purposes, Torch has been consolidated into the Company’s consolidated statements of financial position, results
of operations, and cash flows. At
September 30, 2023 and December 31, 2022 goodwill was $ 1,666,782 There
were no SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) Note
Receivable (Sale of Former Subsidiary) On
May 7, 2021, the Company disposed of its subsidiary True Wireless, Inc. In
connection with the sale, the Company received an unsecured note receivable for $ 176,851 0.6 10 7,461 Payments
are scheduled as follows: Schedule
of Receivables
For the Year Ended December 31,
2023 (3 months) $ 52,227
2024 89,532
2025 44,766
186,525
Less: amount representing interest (9,674 )
Total $ 176,851 On
July 12, 2023, Notice of Default was provided by SurgePays, Inc. to Blue Skies Connections, LLC for failure to pay amounts due under
that certain Promissory Note dated June 14, 2021 by Blue Skies Connections, LLC in favor of SurgePays, Inc. in the original principal
amount of $ 176,851 As
of September 30, 2023, the Company believes the note is collectible. Business
Segments and Concentrations The
Company uses the “management approach” to identify its reportable segments. The management approach requires companies to
report segment financial information consistent with information used by management for making operating decisions and assessing performance
as the basis for identifying the Company’s reportable segments. The Company manages its business as multiple reportable segments.
See Note 10 regarding segment disclosure. The
SurgePhone and Torch Wireless business segment made up approximately 85 72 SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) Revenues
related to this business segment are 100 Accounts
receivable related to these programs made up 98 96 Customers
in the United States accounted for 100 Use
of Estimates Preparing
financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues
and expenses during the reported period. Actual results could differ from those estimates, and those estimates may be material. Significant
estimates during the nine months ended September 30, 2023 and 2022, respectively, include, allowance for doubtful accounts and other
receivables, inventory reserves and classifications, valuation of loss contingencies, valuation of derivative liabilities, valuation
of stock-based compensation, estimated useful lives related to intangible assets, capitalized internal-use software development costs,
and property and equipment, implicit interest rate in right-of-use operating leases, uncertain tax positions, and the valuation allowance
on deferred tax assets. Risks
and Uncertainties The
Company operates in an industry that is subject to intense competition and changes in consumer demand. The Company’s operations
are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business
failure. The
Company has experienced, and in the future may experience, variability in sales and earnings. The factors expected to contribute to this
variability include, among others, (i) the cyclical nature of the industry, (ii) general economic conditions in the various local markets
in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices in connection
with the Company’s distribution of the product. These factors, among others, make it difficult to project the Company’s operating
results on a consistent basis. SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) Fair
Value of Financial Instruments The
Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements The
Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring
basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement.
The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining
fair value. The
three tiers are defined as follows:
● Level
1 – Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets;
● Level
2 – Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace
for identical or similar assets and liabilities; and
● Level
3 – Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. The
determination of fair value and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations
often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation
methodologies applied to unobservable management estimates and assumptions. Management’s assumptions could vary depending on the
asset or liability valued and the valuation method used. Such assumptions could include estimates of prices, earnings, costs, actions
of market participants, market factors, or the weighting of various valuation methods. The Company may also engage external advisors
to assist us in determining fair value, as appropriate. Although the Company believes that the recorded fair value of our financial instruments
is appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values. SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) The
Company’s financial instruments, including cash, accounts receivable, accounts payable and accrued expenses, and accounts payable
and accrued expenses – related party, are carried at historical cost. At September 30, 2023 and December 31, 2022, respectively,
the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. ASC
825-10 “Financial Instruments” Cash
and Cash Equivalents and Concentration of Credit Risk For
purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months
or less at the purchase date and money market accounts to be cash equivalents. At
September 30, 2023 and December 31, 2022, respectively, the Company did not have any cash equivalents. The
Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent
account balances exceed the amount insured by the FDIC, which is $ 250,000 At
September 30, 2023 and December 31, 2022, respectively, the Company did not experience any losses on cash balances in excess of FDIC
insured limits. Accounts
Receivable Accounts
receivable are stated at the amount management expects to collect from outstanding customer balances. Credit is extended to customers
based on an evaluation of their financial condition and other factors. Interest is not accrued on overdue accounts receivable. The Company
does not require collateral. Management
periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible
amounts. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical
collection information and existing economic conditions. Accounts determined to be uncollectible are charged to operations when that
determination is made. SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) Allowance
for doubtful accounts was $ 17,525 There
was no Bad
debt expense (recovery) is recorded as a component of general and administrative expenses in the accompanying consolidated statements
of operations. Inventory Inventory
primarily consists of tablets, cell phones and sim cards. Inventories are stated at the lower of cost or net realizable value using the
average cost valuation method. There
was a provision for inventory obsolescence of $ 0 51,718 At
September 30, 2023 and December 31, 2022, the Company had inventory of $ 14,549,407 11,186,242 Impairment
of Long-lived Assets including Internal Use Capitalized Software Costs Management
evaluates the recoverability of the Company’s identifiable intangible assets and other long-lived assets when events or circumstances
indicate a potential impairment exists, in accordance with the provisions of ASC 360-10-35-15 “Impairment or Disposal of Long-Lived
Assets.” If
impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment to
be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. There
were no SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) Property
and Equipment Property
and equipment is stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over the estimated
useful lives of the assets. Expenditures
for repair and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When
property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective
accounts with the resulting gain or loss reflected in operations. Management
reviews the carrying value of its property and equipment whenever events or changes in circumstances indicate that the carrying amount
of the asset may not be recoverable. There
were no Internal
Use Software Development Costs We
capitalize certain internal use software development costs associated with creating and enhancing internally developed software related
to our technology infrastructure. These costs include personnel and related employee benefits expenses for employees who are directly
associated with and who devote time to software projects, and external direct costs of materials and services consumed in developing
or obtaining the software. Software development costs that do not meet the qualification for capitalization, as further discussed below,
are expensed as incurred and recorded in general and administrative expenses in the consolidated results of operations. Software
development activities generally consist of three stages:
(i) planning
stage,
(ii) application
and infrastructure development stage, and
(iii) post
implementation stage. Costs
incurred in the planning and post implementation stages of software development, including costs associated with the post-configuration
training and repairs and maintenance of the developed technologies, are expensed as incurred. SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) We
capitalize costs associated with software developed for internal use when the planning stage is completed, management has authorized
further funding for the completion of the project, and it is probable that the project will be completed and perform as intended. Costs
incurred in the application and infrastructure development stages, including significant enhancements and upgrades, are capitalized.
Capitalization ends once a project is substantially complete, and the software and technologies are ready for their intended purpose.
There is judgment involved in estimating the stage of development as well as estimating time allocated to a particular project. A significant
change in the time spent on each project could have a material impact on the amount capitalized and related amortization expense in subsequent
periods. We
amortize internal use software development costs using a straight-line method over a three-year estimated useful life, commencing when
the software is ready for its intended use. The straight-line recognition method approximates the manner in which the expected benefit
will be derived. We determined the life of internal use software based on historical software upgrades and replacement. On
an ongoing basis, we assess if the estimated remaining useful lives of capitalized projects continue to be reasonable based on the remaining
expected benefit and usage. If the remaining useful life of a capitalized project is revised, it is accounted for as a change in estimate
and the remaining unamortized cost of the underlying asset is amortized prospectively over the updated remaining useful life. We
also evaluate internal use software for abandonment and use that as a significant indicator for impairment on a quarterly basis. Right
of Use Assets and Lease Obligations The
Right of Use Asset and Lease Liability reflect the present value of the Company’s estimated future minimum lease payments over
the lease term, which may include options that are reasonably assured of being exercised, discounted using a collateralized incremental
borrowing rate. SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) Typically,
renewal options are considered reasonably assured of being exercised if the associated asset lives of the building or leasehold improvements
exceed that of the initial lease term, and the performance of the business remains strong. Therefore, the Right of Use Asset and Lease
Liability may include an assumption on renewal options that have not yet been exercised by the Company. The Company’s operating
leases contained renewal options that expire at various dates with no residual value guarantees. Future obligations relating to the exercise
of renewal options is included in the measurement if, based on the judgment of management, the renewal option is reasonably certain to
be exercised. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of
leasehold improvements, the value of the renewal rate compared to market rates, and the presence of factors that would cause a significant
economic penalty to the Company if the option is not exercised. Management reasonably plans to exercise all options, and as such, all
renewal options are included in the measurement of the right-of-use assets and operating lease liabilities. As
the rate implicit in leases are not readily determinable, the Company uses an incremental borrowing rate to calculate the lease liability
that represents an estimate of the interest rate the Company would incur to borrow on a collateralized basis over the term of a lease
within a particular currency environment. See
Note 8 regarding operating leases. Revenue
Recognition The
Company recognizes revenue in accordance with ASC 606 to align revenue recognition more closely with the delivery of the Company’s
services and will provide financial statement readers with enhanced disclosures. In accordance with ASC 606, revenue is recognized when
a customer obtains control of promised services. The amount of revenue recognized reflects the consideration to which the Company expects
to be entitled to receive in exchange for these services. To achieve this core principle, the Company applies the following five steps: Identify
the contract with a customer A
contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s
rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial
substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable
based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s
ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or,
in the case of a new customer, published credit and financial information pertaining to the customer. SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) Identify
the performance obligations in the contract Performance
obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable
of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily
available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services
is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company
must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract.
If these criteria are not met the promised services are accounted for as a combined performance obligation. Determine
the transaction price The
transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services
to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration
that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending
on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment,
it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company’s
contracts contain a significant financing component. Allocate
the transaction price to performance obligations in the contract If
the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation.
However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract
with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a
specific part of the contract. For example, a bonus or penalty may be associated with one or more, but not all, distinct services promised
in a series of distinct services that forms part of a single performance obligation. Contracts that contain multiple performance obligations
require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless
the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service
that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance
obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the
standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines
related to the performance obligations. SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) Recognize
revenue when or as the Company satisfies a performance obligation The
Company satisfies performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance
obligation is satisfied by transferring a promised service to a customer. The
following reflects additional discussion regarding our revenue recognition policies for each of our material revenue streams. For each
revenue stream we do not offer any returns, refunds or warranties, and no arrangements are cancellable. Additionally, all contract consideration
is fixed and determinable at the initiation of the contract. Performance obligations for Torch and LogicsIQ are satisfied when services
are performed. Performance obligations for ECS and SB are satisfied at point of sale. For
each of our revenue streams we only have a single performance obligation. Surge
Phone Wireless (SPW) and Torch Wireless SPW
and Torch Wireless are licensed to provide subsidized mobile broadband services through the ACP to qualifying low-income customers to
all fifty (50) states. Revenues are recognized when an ACP application is completed and accepted. Each month we reconcile subscriber
usage to ensure the service was utilized. A monthly file is submitted to the Universal Service Administrative Company for review and
approval, at which time we have completed our performance obligation and recognize accounts receivable and revenue. Revenues are recorded
in the month when services were rendered, with payment typically received on the 28th of the following month. Surge
Blockchain Revenues
are generated through the sale of various products such as energy drinks, CBD products, and other top selling products in convenience
store and bodega nationwide. At the time in which our products are sold at the store our performance obligation is considered complete.
At point of sale, our web portal platform initiates an automated clearing house transaction (ACH) resulting in the recording revenue. SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) LogicsIQ LogicsIQ,
Inc. is a lead generation and case management solutions company primarily serving law firms in the mass tort industry. Revenues are earned
from our lead generation retained services offerings and call center activities through CenterCom. Lead
generation consist of sourcing leads, which requires us to drive traffic to our landing pages for a specific marketing campaign. We also
achieve this in certain marketing campaigns by using third-party preferred vendors to meet the needs of our clients. Revenues are recognized
at the time the lead is delivered to the client. If payment is received in advance of the delivery of services, it is included in deferred
revenue, and subsequently recognized once the performance obligation has been completed. Retained
service offerings consist of turning leads into a retained legal case. To provide this service to our customers, we qualify leads through
verification of information collected during the lead generation process. Additionally, we further qualify these leads using a client
questionnaire which assists in determining the services to be provided. The qualification process is completed using our call center
operations. Effective
February 1, 2023, LogicsIQ started offering call center services to existing clients. These services are similar in nature to the services
CenterCom offers LogicsIQ. The total revenue from these services for the three and nine months ended September 30, 2023 was $ 340,989 1,212,019 If
payment is received in advance of the delivery of services, it is included in deferred revenue, and subsequently recognized once the
performance obligation has been completed. At the time of delivery of leads and the creation of retained cases (customers are qualified
at this point), our performance obligation has been completed and revenues are recognized. Arrangements with customers do not provide
the customer with the right to take possession of our software or platform at any time. Once the advertising is delivered, it is non-refundable. Surge
Fintech and ECS Revenues
are generated through the sale of telecommunication products such as mobile phones, wireless top-up refills, and other mobile related
products. At the time in which our products are sold through our online web portal (point of sale), our performance obligation is considered
complete. At point of sale, our web portal platform initiates an automated clearing house transaction (ACH) resulting in the recording
revenue. SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) Contract
Liabilities (Deferred Revenue) Contract
liabilities represent deposits made by customers before the satisfaction of performance obligation and recognition of revenue. Upon completion
of the performance obligation(s) that the Company has with the customer based on the terms of the contract, the liability for the customer
deposit is relieved and revenue is recognized. At
September 30, 2023 and December 31, 2022, the Company had deferred revenue of $ 118,000 243,110 The
following represents the Company’s disaggregation of revenues for the nine months ended September 30, 2023 and 2022: Schedule
of Disaggregation of Revenue from Contracts With Customers
For the Nine Months Ended September 30,
2023 2022
Revenue Revenue % of Revenues Revenue % of Revenues
Surge Phone and Torch Wireless $ 89,536,546 85.42 % $ 61,462,327 72.04 %
Surge Blockchain, LLC 30,533 0.03 % 102,378 0.12 %
LogicsIQ, Inc. 6,647,061 6.34 % 10,689,006 12.53 %
Surge Fintech & ECS 8,609,570 8.21 % 13,064,149 15.31 %
Total Revenues $ 104,823,710 100 % $ 85,317,860 100 % Cost
of Revenues Cost
of revenues consists of purchased telecom services including data usage and access to wireless networks. Additionally, prepaid phone
cards, commissions, and advertising costs. Income
Taxes The
Company accounts for income tax using the asset and liability method prescribed by ASC 740, “Income Taxes”. SURGEPAYS,
INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER
30, 2023 (UNAUDITED) The
Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using
that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position
will be sustained upon examination by the tax authorities. As of September 30, 2023 and December 31, 2022, respectively, the Company
had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. The
Company recognizes interest and penalties related to uncertain income tax positions in other expense. No interest and penalties related
to uncertain income tax positions were recorded for the nine months ended September 30, 2023 and 2022, respectively. For
the three and nine months ended September 30, 2023, the Company generated net income. The Company currently has an unapplied net operating
loss carryforward (deferred tax asset), which is currently being evaluated for applicability in offsetting the current taxable net income.
The Company believes the current net operating loss carryforward is in excess of any amounts of income tax that may be due. At September
30, 2023, the Company has an estimated income tax liability of $ 0 Investment
– Former Related Party On
January 17, 2019, we announced the completion of an agreement to acquire a 40 Anthony
N. Nuzzo, a former director and officer and the holder of approximately 10% of our voting equity, had a controlling interest in CenterCom
Global. During 2022, Mr. Nuzzo passed away. See Form 8-K filed on March 24, 2022. The
strategic partnership with CenterCom as a bilingual operations hub has powered our growth and revenue. CenterCom has been built to support
the infrastructure required to rapidly scale in synergy and efficiency to support our sales growth, customer service and development. We
account for this investment under the equity method. Investments accounted for under the equity method are recorded based upon the amount
of our investment and adjusted each period for our share of the investee’s income or loss. All investments are reviewed for changes
in circumst |
